Published: Fri, October 13, 2017
Business | By Max Garcia

TCS Q2 profit falls 2% to Rs6,446 crore

TCS Q2 profit falls 2% to Rs6,446 crore

TCS posted a net profit of 64.46 billion rupees ($990 million) in the three months to September 30, beating analysts' average estimate of 63.06 billion rupees, Thomson Reuters data showed.

TCS' operating margins expanded 1.7 percentage points sequentially to 25.1% in the quarter, aided by a decline the value of Indian rupee against the USA dollar and cross-currency gains.

The company, known as TCS, said net income in the quarter ended in September was 64.46 billion rupees ($985 million), compared with 65.86 billion rupees a year earlier, according to a statement.

The company, which is the crown jewel of the Dollars 104 billion salt-to-software Tata Group, declared a dividend of Rs 7 per share and set October 26 as the record date.

Banking, financial services and insurance (BFSI), the bread and butter for all Indian IT service providers, grew 1.9% against 2.3% in the previous quarter on a constant currency basis, while retail fell almost 1%, from a growth of 2%, as traditional retailers hobble under the onslaught of online counterparts. On a year on year basis, all industry verticals - with the exception of BFSI (banking and financial services) and retail - grew above 9.5 per cent.

TCS said growth was led by Europe (up 5.3 per cent Q-o-Q), Latin America (up 5.7 per cent Q-o-Q), APAC (up 3 per cent Q-o-Q) and United Kingdom (up 2.5 per cent Q-o-Q).

On a constant currency basis, which discounts the impact of currency changes and over which companies have no control, India's biggest software services company by revenue reported 1.7% growth, lower than the 2% it reported in the April-June period.

N. Ganapathy Subramaniam, Chief Operating Officer & Executive Director, said: "it has been a very satisfying performance this quarter, striking a good balance between pursuing revenue growth, particularly in Digital opportunities, while tightening our execution to deliver greater efficiency". North America grew by 1.4 per cent Q-o-Q with continued softness in banking and retail. "We expect stronger and steadier growth ahead".

We have slightly increased our margin expectations, operational trigger is something which will continue. TCS shares have returned a respectable 7% since january, at a time when the BSE IT Index has given abysmal 1.4% in the same period.

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